Leasing out state-owned sugar mills lauded by stakeholders

Stakeholders in the sugar industry have applauded the decision by President William Ruto's administration to lease out failing state-owned sugar mills to private investors, believing it will revitalize the sector and make it profitable. Chemilil Sugar Company Deputy General Manager Michael Wanjala, along with other industry players, hailed the move as a masterstroke, stating that private investors possess the necessary capital and expertise to give the sector a competitive edge.

Wanjala highlighted that Kibos Sugar and Allied Industries Limited, which now operates Chemilil Sugar Company, has invested extensively to bring the factory back to operation after it was in poor condition when they took over in May of the previous year. The leasing arrangement is expected to boost job creation, socioeconomic development, and enhance local sugar production, reducing dependency on imported sugar.

Wanjala noted that Kenya has been a sugar-deficient country for a long time, constantly importing sugar from the East Africa and COMESA regions due to low local production and increasing demand. He attributed the country's sugar deficit to the inability of production to keep up with demand, estimating a yearly shortfall of around 200,000 metric tonnes of sugar.

Wanjala assured that Chemilil Sugar Company, Sony Sugar Company, Muhoroni Sugar Company, and Nzoia Sugar Company used to produce sufficient sugar for local and international markets in the 1960s and 1970s before things declined. He emphasized that the group is now bringing in the expertise and investment needed to revive the sector.

Wanjala further explained that they plan to replace aging equipment and adopt new technology to improve efficiency and reduce costs. They have also invested in their workforce, machinery, and farmers. Wanjala revealed that the factory was initially planned to be closed for about 1.5 years to undergo a complete overhaul but were persuaded by the government to implement gradual improvements while continuing production.

So far, they have crushed about 110,000 tonnes of cane, equivalent to Sh750 million in payments to farmers in the region. Chemilil Sugar's Project Manager, Joseph Kiilu, also praised the leasing program as a turning point for the sugar industry, noting that it has allowed them to implement the technical vision they had been striving for, including acquiring new technology and maintaining the factory according to technical standards.